TaxTMI 
TaxTMI 
2024 (6) TMI 1560
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....rom co-operative banks u/s. 80P(2)(d) which CPC has disallowed vide its intimation dated 25/11/2021. The ld. CIT(A) held that deduction u/s. 80P(2)(d) is not allowable in view of the decision of the Hon'ble Supreme Court in the case of Totagars Cooperative Societies Ltd. reported in 322 ITR 323 and decision of the Hon'ble Karanataka High Court in the case of PCIT vs. Totagars Cooperative Sale Society (395 ITR 611). 3. The issue, whether disallowance can be made u/s 80P (2) (d) within the scope of adjustment u/s 143(1)(a). First of all, the primafacie adjustment for disallowance u/s. 143(1) has been made on the ground that assessee has not filed the return of income during the due date. The assessee being a Coopertaive Housing Society and....
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....ied. Here, we are not dealing with, whether assessee can be treated as cooperative bank or not. Here the issue is, assessee had made investment in the cooperative banks, whether interest earned from such investment falls in the category of interest earned from cooperative society or not so as to get benefit u/s 80 P(2)(d)? 5. Section 80P provides that in case of assessee being a cooperative society, the gross total income which includes any income referred to sub-section 2 shall be deducted in accordance with subject to provision of this section. Sub-section 2 of section 80P Clause (a) states that, "in the case of cooperative society engaged in cooperative business of banking and providing credit facilities to its members or ..........
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....on'ble Jurisdictional High court in the case of Quepem Urban Cooperative Credit Society Ltd. vs. ACIT reported in (2015) 377 ITR 272 (Bom), after analyzing the relevant provision of Section 80P including Sub-section (4) had categorically held that cooperative banks are to be treated as cooperative society. In so far as deduction of interest earned on investment made in cooperative bank, Clause (d) of section 80P(2) provides that any income by way of interest on dividend derived from cooperative societies from its investment with any other cooperative societies, the whole of such income is deductable u/s 80P. The cooperative bank has been defined in part 5 of the Banking Regulation Act 1949. Section 56(ccv) provides that primary cooperative ....
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....substantial questions of law. 7. However, the contention being taken by the learned counsel is untenable. For the issue that was before the ITAT, was a limited one, namely whether for the purpose of Section 80P(2)(d) of the Act, a Co-operative Bank should be considered as a Cooperative Society or not? For, if a Co-operative Bank is considered to be a Co-operative Society, then any interest earned by the Co-operative Society from a Co-operative Bank would necessarily be deductable under Section 80P(1) of the Act. 8. The issue whether a Co-operative Bank is considered to be a Co-operative Society is no longer res integra. For the said issue has been decided by the ITAT itself in different cases. Moreover the word "Co-operati....
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....cable under Section 80P(2)(a)(i) of the I.T. Act. For, in the present case the interpretation that is required is of Section 80P(2)(d) of the I.T. Act and not Section 80P(2)(a)(i) of the I.T. Act. Therefore, the said judgment is inapplicable to the present case. Thus, neither of the two substantial questions of law canvassed by the learned counsel for the Revenue even arise in the present case. 8. This view has further been reiterated by the judgment of Hon'ble Kerala High Court in the case of PCIT vs. Percoorkada Service Co. Bank Ltd. (2022) 442 ITR 141 (Kerala) dated 01.11.2021, wherein one of the question before the Hon'ble High Court was, whether the interest income earned from deposits with the banks is eligible for deduction ....